Bayleys news & articles

Ballot draw ignites huge sell down of new residential development

Monday, 16 November 2015

Tags: AucklandResidential

A group of new Auckland home owners – including 25 whose names were literally drawn from a hat for the right to purchase their dream residence - have experienced the benefits of buying property off the developer’s plans.

The 58 townhouses which went up for sale are part of a huge urban redevelopment project at the former Crown Lynn pottery and brick-making site in West Auckland. Part of the sale process involved the sale of 25 townhouses sold through a ballot draw held on October 31.

The development is called West Edge, and when complete, will contain some 1800 new residences. Development of West Edge is being undertaken by New Zealand-based company Avanda Limited which has appointed well known local designers and consultants.

The West Edge project has been designated a Special Housing Area under the joint Auckland Council/Government housing accord. This designation will allow for the fast-tracking of the building consent approvals process.

Marketing for the first batch of 88 townhouses at West Edge began in September – with potential property owners registering their interest in securing one of the first sites which are scheduled for completion at the beginning of 2017. Nine of the 88 townhouses have been deemed in the Government’s ‘affordable housing’ bracket.

Bayleys Real Estate sales manager for the West Edge development, Andrea Ritchie, said the initial level of interest in the homes was far greater than either the project developer or the agency had envisaged.

“As the result of what was a massive ‘over-subscription‘ for the limited number of townhouses being constructed in the first phase, we then introduced a ballot process,” Ms Ritchie said.

All potential buyers who had registered their interest after the initial marketing were contacted simultaneously. They were then all offered the opportunity to put their names forward for what was whittled down to a selection of 25 townhouses from among the first batch of 88. Ballot applications were filed by 120 parties, along with a $1000 bank deposit – with all funds held in a trust account.

The lucky draw for the 120 homeowner-hopefuls took place at the West Edge development show home in New Lynn. Avanda Limited project manager Winson Tan said all ballot entrants had been given the full paperwork and documentation required to undertake all the necessary due diligence in advance of the draw. Resource consent has been granted for stage one of the project.

Successful ballot winners were required to pay a 10 percent deposit on the day, with the remainder of the purchase price to be settled on completion of building. Ms Ritchie said she believed it was the first time such a process has been used in New Zealand for selling a home. Just three potential buyers whose names were drawn from the ballot turned down their right to purchase.

“Those drawn out of the ballot were extremely delighted to say the least that their names were selected,” Mr Tan said. “Of course, fullrefunds were offered to all unsuccessful ballot applicants.”

Immediately following the ballot draw, deposits were taken from buyers for an additional 14 townhouses in stage one of the West Edge development. A day later, a further 15 buyers had paid deposits to secure their townhouse dwelling within the precinct.

Ms Ritchie said that of the remaining 34 townhouses from West Edge stage one, 25 were now on the market for sale. She expected that stock to be completely sold out before Christmas. Meanwhile, the nine affordable housing units within West Edge stage one are to be sold through another ballot process taking place on November 28.

Ms Ritchie said: “Buying off-plan has traditionally been a successful and easily-understood purchasing mechanism for apartment projects. We expect it to be warmly embraced by younger home buyers stretching their budgets to achieve the Kiwi dream of owning their own home.

“The rationale essentially enables the likes of first home buyers and those seeking affordable homes to secure their dream residence with minimum initial outlay at a fixed price on completion.”

When complete, the 12 hectare West Edge complex will encompass duplex and terraced housing, and a handful of mid-rise apartment blocks. West Edge is one of the biggest single designer-planned developments seen in Auckland - rivalling the likes of Hobsonville Point in West Auckland, Stonefields in East Auckland, and Millwater just north of Auckland.

Mr Tan said the new West Edge residential precinct reflected the shift of Auckland’s inner-city urban fringe westward through Point Chevalier, past Avondale, and out to New Lynn. The West Edge residential precinct will be rolled out in up to six stages over what is currently projected to be a six to seven year time-frame.